The percentage of federal employees classified as 'thriving' plummeted from 58% in 2023 to just 48% in 2024, according to Govexec. The 10-percentage-point decline means nearly half the federal workforce now struggles with well-being.
However, 2025 federal reforms, intended to modernize the workforce, coincided with sharply declining worker engagement and well-being. This decline disproportionately affects federal workers compared to state and local governments, creating an unexpected tension.
Based on this significant drop in thriving and engagement, coupled with increased burnout, federal agencies face a looming crisis in workforce morale and retention, which could impair public service delivery.
Federal Workers Report Increased Burnout
In Q2 2025, federal employees were eight to nine points more likely than their state and local counterparts to report high burnout, according to Gallup. Federal workers experience unique, significant stress.
Around 29% of federal employees reported their workplace had been disrupted to a very large extent in Q3 2025, Federal News Network stated. Such widespread disruption correlates directly with the 10-percentage-point drop in 'thriving' status, indicating the reforms are a primary driver of well-being erosion.
Federal employment also began to decline relative to state and local government employment starting in late spring 2024, Gallup reported. The decline in federal employment points to a loss of competitive appeal for federal positions, manifesting as a tangible shift in the labor market.
Why is Federal Engagement Declining?
Global employee engagement declined for the second year in a row in 2025, according to Gallup. Yet, the federal sector's decline is not merely part of a larger trend.
In Q2 2024, the share of engaged federal workers fell six percentage points more than among state and local peers, Gallup found. The accelerated, disproportionate decline suggests specific internal stressors beyond general economic or social factors.
Artificial intelligence adoption also plays a role. About 43% of federal employees use AI at least sometimes, according to Federal News Network, yet only 0.5% of all federal jobs are AI-specific.
The current approach to AI integration implies a short-sighted strategy focused on incremental efficiency gains rather than strategic workforce transformation. Such an approach risks exacerbating disruption and burnout without offering clear career pathways.
Impact on Government Services
Increased burnout among federal workers, coupled with widespread workplace disruption reported by nearly a third of employees in Q3 2024, translates into diminished capacity and efficiency. Agencies struggling with morale and retention may face difficulties maintaining service levels, directly compromising public service delivery.
The federal sector's declining engagement and well-being is manifesting as a tangible shift in the labor market. The loss of competitive appeal could lead to talent shortages in critical government functions.
Ultimately, the human cost to federal employees from the 2025 reforms could compromise the effectiveness and stability of federal government operations. Any efficiency gains from reforms appear to come at a significant cost to the federal workforce, impacting service quality for the public.
Addressing Federal Workforce Challenges
To mitigate this crisis, federal agencies must re-evaluate the impact of the 2025 reforms on employee well-being. Recognizing the disproportionate decline in federal worker engagement, compared to state and local counterparts, is a critical first step.
Leadership needs to address high rates of burnout and reported workplace disruption. Strategies could include investing in mental health resources, clarifying new job roles, and ensuring adequate support for employees adapting to new technologies like AI.
The federal government's approach to AI integration requires reconsideration. Creating more AI-specific job pathways, rather than solely augmenting existing roles, could offer clearer career progression and reduce employee strain. If federal agencies do not show concrete actions to improve engagement by Q3 2025, a continued talent exodus appears likely.
